Tuesday 28 January 2020 2:55 pm

UK businesses breathe sigh of relief as Huawei gets the green light

UK businesses today welcomed the decision to allow Huawei a limited role in the country’s 5G networks, hailing a “sensible compromise” to the fraught row over national security.

In a long-awaited ruling, the government said the Chinese tech firm, which has been classed a “high-risk vendor”, will be allowed to build non-core parts of the next-generation mobile network.

However, Huawei will be excluded from critical core functions and from sensitive geographic locations such as nuclear sites and military bases.

In addition, the company will have its market share limited to 35 per cent in periphery parts of the network, such as mobile masts.

Matthew Fell, chief UK policy director at the CBI, said the decision was a “ sensible compromise that gives the UK access to cutting-edge technology, whilst building in appropriate checks and balances around security”.

The telecoms industry had urged the government not to implement a blanket ban on Huawei, warning that such a decision would slow down the rollout of 5G across the country.

A BT spokesperson hailed an “important clarification for the industry”, adding: “The security of our networks is an absolute priority for BT, and we already have a long-standing principle not to use Huawei in our core networks.”

While all four major mobile providers have excluded Huawei from core parts of their networks, the impact of the ban on sensitive geographic locations is not yet clear.

Get the news as it happens by following City A.M. on Twitter

Vodafone and Three both today said they were reviewing the detail of the government’s decision and its potential impact.

The verdict brings to an end a long-running row over Huawei’s role in building key national infrastructure amid allegations its kit could be used for spying by authorities in Beijing.

“Finally, some form of resolution that allows the UK telcos to move forward,” said telecoms analyst Paolo Pescatore.

“Huawei is an important partner along with others given the lack of competition in this landscape. While competition is healthy, security is paramount in a world where networks are becoming software driven.”

Pescatore added that the decision would now create a “domino effect” as other markets look to the UK as a precedent.

Jimmy Jones, telecoms cybersecurity expert at Positive Technologies, said the decision was “not surprising”.

“Although it’s hard to ignore the geopolitical debates which continue to make headlines, it’s also important to recognise the commercial implications of shunning Huawei, which when compared to other suppliers, is way ahead,” he said.

Huawei vice-president Victor Zhang said: “Huawei is reassured by the UK government’s confirmation that we can continue working with our customers to keep the 5G rollout on track. 

“This evidence-based decision will result in a more advanced, more secure and more cost-effective telecoms infrastructure that is fit for the future. It gives the UK access to world-leading technology and ensures a competitive market.”